3.8 million homeowners would still benefit from refinancing amid rise in mortgage rates, says Black Knight
Mortgage rates are on the rise, however there are still millions of borrowers that could save hundreds on their monthly mortgage payments through refinancing, according to Black Knight (iStock)
Mortgage rates are rising, having surged at the beginning of 2022 to their highest level in nearly two years. According to the latest data from Freddie Mac, they're hovering just under 4%. Despite these increases, millions of Americans could still benefit from refinancing their mortgage, according to mortgage technology and data provider Black Knight.
Last week, mortgage rates moved up to 3.92% annual percentage rate (APR) for a 30-year loan, which Freddie Mac Chief Economist Sam Khater said was approaching highs not seen since the spring of 2019.
"As rates and house prices rise, affordability has become a substantial hurdle for potential homebuyers, especially as inflation threatens to place a strain on consumer budgets," Khater said at the time. However, Black Knight’s data showed that about 3.8 million Americans could still lower their monthly payment through a refinance.
If you are interested in taking out a mortgage refinance to reduce your monthly mortgage payments at a lower interest rate, visit Credible to find your personalized interest rate and see how much you could save without affecting your credit score.
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3.8M could benefit from refinancing, but that amount is shrinking quickly
Black Knight said that the 3.8 million homeowners who could lower their monthly mortgage payments by way of a refinance is actually down notably. Its data indicated that heading into this year, there were just over 7 million more high-quality candidates for a mortgage refinance.
The company says it defines refinance candidates as those holding a 30-year fixed-rate mortgage, with a maximum 80% loan-to-value ratio and who have credit scores of at least 720. These candidates can shave at least 0.75% off their current mortgage loan. However, removing those qualifiers would allow 6.9 million to benefit from refinancing, Black Knight says.
Homeowners may want to consider refinancing their mortgage, as doing so could lock in a lower rate and help to save money. If you want to see how much you could save, visit Credible to compare multiple mortgage lenders at once and choose the one with the best interest rate and term for your loan amount.
FED SIGNALS MARCH RATE HIKE – HERE’S WHAT THAT MEANS FOR YOUR WALLET
Mortgage rates expected to continue rising ahead of anticipated Fed rate hikes
Black Knight’s interest rate tracker, which examines the movement of 30- and 15-year mortgages daily, showed that interest rates had risen to 4.12% at the beginning of the week. The Federal Reserve also signaled during its meeting last month that it plans to raise interest rates in March to combat rising inflation, which would further increase mortgage rates.
Inflation in January surpassed its previous 40-year high set in December 2021.
"Today’s clear signal from the Federal Reserve that they will hike rates in March was no surprise, given the strong job market and inflation well above the 2% target," said Mike Fratantoni, Mortgage Bankers Association (MBA) senior vice president and chief economist, following the Fed's meeting. "Similarly, the Fed’s move to quickly end any further growth to their balance sheet, thereby reducing accommodation at the longer end of the yield curve, also makes sense given the evolution of the economy."
If you’re thinking of refinancing your mortgage, consider using Credible. Refinancing could help you lower your monthly payment and as a result, save money over time. You can use Credible's free online tool to easily compare multiple lenders and see prequalified rates in as little as three minutes.
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